PM Modi a great ad man, Trump dominating Davos 2025, says S4 Capital's Martin Sorrell

Martin Sorrell at WEF 2025 in Davos.

At the World Economic Forum 2025, Moneycontrol caught up with advertising guru Martin Sorrell, executive chairman, S4 Capital, a digital advertising and marketing services company, who spoke on how PM Narendra Modi is a great ad man as well as US President Donald Trump dominating Davos 2025.

Sorrell said that Davos this year has got the counter pull of the Trump inauguration.

Edited excerpts from the interview:

January 20 marks the inauguration of Donald Trump as the 47th US President as well as it is the first day of Davos 2025. What's the role of Davos going to be in a post-Trump world?

I think growth is going to be more tempered. I think inflation is stickier. This time last year we thought interest rates were going to come down. That was a projection. They didn't come down as much as people thought. People are talking about hikes or the possibility of hikes in the US and the 10-year treasury is close to 5 percent. So, interest rates are going to be higher. Therefore, two things have become important. The first is you have to pick your geographies like India for growth. And the second thing is, in parts of the world where growth is not as great like Europe, UK, France, Germany, you have to use AI, quantum computing, the metaverse, blockchain to improve efficiency.

These are the two things that are top of the agenda for people trying to run many global companies. So, pick your geographies and use the amazing advances in technology to improve efficiency and effectiveness.

The three big issues geopolitically are US-China relationships or lack of them and I think that's going to bifurcate still further with Trump.

The second, of course, is Russia and Ukraine. If there is an agreement over Ukraine, will Russia check or will Russia go further in time? And the third thing is Iran. I think the Trump administration will be good news for the Middle East. We had good news over the weekend. As a Jew, I was delighted to see the release of some hostages. I want the rest to come home as rapidly as possible. A ceasefire at least temporarily in Gaza is also a good thing.

But I think the Trump administration and its relationship with Saudi and the Middle East generally, with Qatar and elsewhere, bodes well for the Middle East. Maybe the Saudis will normalise relationships with Israel. Maybe we'll have some form of political resolution of the problems around Palestine and the West Bank.

US-China relationships will bifurcate even more.

Do you think a forum like the World Economic Forum will still be relevant in an era of Trump?

Davos this year has probably got the counter pull of the (Trump) inauguration. Some people are managing somehow to do both. Some have chosen one or the other. I think the attendance this year is pretty strong. I'm talking to people on the airlines, for example, the inbound is as strong as it was pre-Covid. So, it's picked up. So, I think people do see this as an event. The conference (WEF) has lost its importance in terms of the sessions. It's become an expensive networking event. But it is a super efficient way of seeing a lot of people very quickly in a short period of time.

President Trump will be addressing the conference and that will be the top of the agenda. He will be delighted to know that everybody is talking about him. And he does dominate the agenda.

Last year you told us that you're a raging India bull. What do you make of Modi's third term? 

I remain a raging India bull. World Economic Forum president Børge Brende's estimates that India will account for 20 percent of the worldwide growth.

He (Modi) understands branding. He's a great ad man. Well, I think India is front and centre of the forum here (Davos). Indian representation is very strong. You look at the inauguration. Indian representation is extremely strong too.

The projections are that by 2050, India will be the third largest economy in the world. It's already the most populous economy in the world. Its birth rate, although it is, I think, coming down, is still strong enough to increase the population.

I'm an increasingly raging Indian bull.

Are we going to see more consolidation happening in the advertising industry?

The strong will devour the weak. You've got six holding companies, which will be reduced to five if the IPG Omnicom deal goes through. It's going to result in a lot of redundancies and the number of people will go down from 1,27,500, to about 1,10,000.

Publicis might devour parts of Dentsu, which is one of the weak ones. So, I think probably the six we know will go to five. I think the five could go to four. And I think the four could actually go to three. I think you could end up with Omnicom and Publicis as two of them. And maybe Havas and Dentsu get together. Havas now is separate. A merger between Havas and Dentsu International would make sense. And maybe Publicis can pick up some pieces of WPP. It is in an extremely weak position. Bain Capital announced the sale of Kantar Media to HIG Capital, a private equity company, for a billion. The billion doesn't flow through to WPP. It flows through to Kantar. It strengthens Kantar's balance sheet. And maybe there'll be a distribution to WPP. But all the asset sales that WPP has made, which were to reduce debt, debt is now greater than it was two or three years ago. So, for all this talk about simplification and debt reduction, they haven't achieved anything. So, you've got basically two very strong companies, four weaker companies.

They had lost Coke, they lost General Motors, they lost Amazon, they lost Pfizer, they lost J&J. No analyst, no journalist, with all due respect, has sat down and analysed how much business IPG lost over the last three or four years. So, basically, the strong will consume the weak.

Tell us about S4 Capital's plans for India?

We've got a small operation in New Delhi. And we're very keen to expand it still further. I think we're very keen to see how we can expand it to even greater.

The Indian advertising market is very vibrant, but is still dominated by traditional media. The world is about 70% digital now. It's about a trillion dollars of spend in the world. And $700 billion is digital and $300 billion is traditional. The traditional piece is declining, going down by about 0% to 5% if you've got live sports.

The streamers are now like Netflix and others have caught on to the strength of sports like the IPL. There'll be some interesting changes in that area. I'm very bullish, not only on India, but the Indian advertising market too. And the two work in tandem. If corporate profits are strong, which they are in India, advertising is strong as a direct correlation. That's probably the tightest correlation that exists. So, a vibrant India means a vibrant Indian advertising market. And the Indians are very strong technologically. They've woken up to the importance of digital communication, they'll work even more to it in the future.

How are you using AI in your daily life? Do you have any go-to AI apps? 

I do. It's a very funny story. So, I was with our brokers. We were having a New Year lunch. And we were talking to the analyst. I said I will instantly write a circular on S4. And I went to Gemini. In 10 seconds, I had the circular. So, it is amazing.

Changing the speed with which we get advertising to market is super quick now, personalising at a scale we never thought is possible. For a Netflix campaign, we could produce a a million-and-a-half assets previously but now we can do multiples of that on an individualised basis.

Media planning and buying, that's the profit driver. I think that industry employs about 2,50,000 people. They're not going to be 2,50,000 people driving that in the future. It's going to be much less. So, algorithms in the investment business, the equity investment business, for example don't use manual systems or semi-manual systems like we do in the advertising business. And if you think about that trillion dollars that clients spend, that should be analysed algorithmically. And the outputs will be far superior, which a 25-year-old media planner or buyer will be able to use much more effectively than trying to do it himself or herself.